Market Review

Malaysia:. The FBM KLCI (-0.2%) extended its losses as the persistently high Covid19 cases continue to sap sentiment. The lower liners ended mixed, while the healthcare (+2.2%) and property (+0.2%) sectors outperformed the negative broader market.

Global markets:. The US stockmarkets extended their gains as the Dow added 0.8%, buoyed by the strong batch of corporate earnings such as Verizon and Coca-Cola. European stockmarkets also rallied ahead of the European Central Bank interest rate decision, while Asia stockmarkets ended mostly higher.

The Day Ahead

The FBM KLCI extended its losses after a volatile session due to persistent selling activities as Covid-19 infection rates stayed high amid the Delta variant. However, we believe the high numbers in Covid-19 cases may shift investors’ focus on healthcare sector, while broader market sentiment could stay tepid without any fresh catalysts. Investors may watch Malaysia's inflation rate which will be released tomorrow. Commodities wise, oil price has staged a rebound in expectation for a higher demand amid economic recovery.

Sector focus:. Technology stocks on the local front may mirror the overnight positive performance in Nasdaq ahead of the reporting season in the US. Besides, investors may pick up stocks in the healthcare sector ahead of the reporting season in expectation for solid results amid high daily Covid-19 cases.

The FBM KLCI closed lower for a second session as the key index failed to hold on to its gains despite higher opening. Technical indicators remained mixed as the MACD Histogram has extended a green bar, while the RSI hovered below the 50 level. The key index may continue to consolidate, with resistance set at 1,525- 1,548, while the support level is located at 1,500.

Company Brief

AirAsia Group Bhd is seeking an extension until 31st December 2021 to undertake a private placement involving up to 668.4m shares. The low-cost carrier had on 21st January 2021, announced the private placement representing up to 20.0% of the existing shares of 3.34bn shares as at 18th January 2021. Based on the indicative issue price of 68 sen, it was expected to raise gross proceeds of up to RM454.5m. (The Star)

Malaysia Airports Holdings Bhd (MAHB) has inked a tripartite memorandum of understanding (MoU) with Skyports and Volocopter to conduct a feasibility study for the deployment of vertiport infrastructure in Malaysia. Under the MoU, the parties will combine their distinct aerospace and aviation expertise to conduct a feasibility study, examining suitable vertiport solutions to enable the safe take-off and landing of passenger electric vertical take-off and landing vehicles. (The Edge)

Kejuruteraan Asastera Bhd (KAB) has announced that its wholly-owned subsidiary KAB Technologies Sdn Bhd has entered into a binding term sheet with Vodex Technical Services Sdn Bhd to expand its mechanical work division. Under the binding term sheet, a special-purpose vehicle named TVT Link Tech Solutions Sdn Bhd was formed. (The Edge)

Hextar Global Bhd has entered into a consortium agreement with Dagang NeXchange Bhd's major shareholder Arcadia Acres Sdn Bhd besides Fass Payment Solutions Sdn Bhd's special-purpose vehicle Ihsan Equity Sdn Bhd to establish a Syariah-compliant digital bank. The consortium agreement is pursuant to the submission for a digital banking licence application to Bank Negara Malaysia (BNM) on 30th June 2021. (The Edge)

Sapura Energy Bhd has secured seven contract wins and extensions in Malaysia and Thailand for its engineering and construction, operations and maintenance, and drilling segments with a combined value of RM1.20bn. (The Edge)

Favelle Favco Bhd has secured purchase orders for offshore cranes, tower cranes, compressor system manpower, upgrade work and solar system with a combined value of RM121.1m. The customers are Federal Hardware Engineering Co Pte Ltd, Hyundai Engineering and Construction Co Ltd, G A Caelli Holdings Trust, Afcons Infrastructure Ltd, Advance Gas Turbine Solutions Sdn Bhd, Malaysia LNG Sdn Bhd, Muhibbah Marine Engineering Sdn Bhd and PTTEP Sarawak Oil Ltd. (The Edge)

Axis Real Estate Investment Trust’s (REIT) 2QFY21 net property income increased 9.3% YoY to RM53.4m, on higher property income with an expanded property portfolio. Revenue for the quarter added 8.8% YoY to RM60.4m. A second interim income distribution per unit of 2.4 sen, including a non-taxable portion of 0.51 sen, payable on 30th August 2021 was declared. (The Edge)

Green Packet Bhd, through its wholly-owned subsidiary Kiplepay Sdn Bhd, has received approval from BNM to roll out three new features for its e-money business which operates the e-wallet "kiplePay". The three new features are a new e-wallet limit of RM10,000, issuance of virtual and physical prepaid cards linked to kiplePay in partnership with the largest payment network in the world, and the Electronic Know-Your-Customer. (The Edge)

INIX Technologies Holdings Bhd has proposed to undertake a private placement of 46.7m new shares in the company to diversify into the glove business. The private placement is expected to raise gross proceeds of up to RM4.5m, based on the illustrative issue price of 9.6 sen per placement share. (The Edge)

Source: Mplus Research - 22 Jul 2021